UPDATE 1-Hess NJ refinery to add $45 mln in smog controls

April 25, 2012|Reuters

April 25 (Reuters) - Hess Corp has agreed to pay an$850,000 civil penalty and spend more than $45 million on newpollution controls to resolve Clean Air Act violations at its70,000 barrels-per-day refinery in Port Reading, New Jersey, theU.S. government said on Wednesday.

The controls will cut nitrogen oxide emissions and other airpollution, and the Department of Justice said it was the 31stsuch agreement with refineries across the United States.

The state of New Jersey actively participated in thesettlement with Hess and will receive half of the civil penalty,the U.S. government said in a statement.

In response to an analyst's question during the company'sfirst quarter earnings call on Wednesday, CEO John Hess saidthat the refinery produces earnings, but no profits right now,due mainly to market conditions.

There are no plans to exit that business, he added.

The New Jersey refinery does not run crude oil. Rather, itis a fluid catalytic cracking unit (FCC) with associateddownstream units used to make predominantly gasoline anddistillates.

According to U.S. Energy Information Administration data,the refinery's primary feedstock is very low sulfur straight-runresidual fuel oil sourced from the Skikda refinery in Algeria.Hess imported roughly 50,000 bpd of this material from Algeriain January 2012, the latest month for which data is available.

The Port Reading plant was shut for maintenance in earlyFebruary and returned to service on Feb. 18.

In late February Hess and joint-venture partner Petroleos deVenezuela permanently shut their 350,000 bpd Hovensa LLCrefinery in the U.S. Virgin Islands as the plant was a perennialmoney-loser.